Cash Flow to Debt Ratio Calculator
Measure company's ability to cover total debt with operating cash flow
Calculate Cash Flow to Debt Ratio
Cash generated from primary business operations (in millions/thousands)
Total debt including short-term and long-term debt
Time period for the analysis
Cash Flow to Debt Ratio Results
Formula: Cash Flow to Debt Ratio = (Operating Cash Flow ÷ Total Debt) × 100
Calculation: ($0 ÷ $0) × 100 = 0.00%
Ratio Interpretation
Example: Boeing Analysis (Historical)
Boeing Q4 2018 vs Q1 2019
Q4 2018:
Operating Cash Flow: $2,947 million
Total Debt: $13,800 million
Ratio: 21.36%
Q1 2019:
Operating Cash Flow: $2,788 million
Total Debt: $14,700 million
Ratio: 18.97%
Warning Signs Detected
• Declining cash flow: $2,947M → $2,788M
• Increasing debt: $13.8B → $14.7B
• Deteriorating ratio: 21.36% → 18.97%
• Later: Negative cash flow (-$590M) in Q2 2019
• Eventually: Stock price declined ~50% by 2020
Ratio Benchmarks
Analysis Scenarios
Why Use This Ratio?
Measures real cash generation capability
Better than net income-based ratios
Reveals financial stress early
Critical for investment decisions
Helps assess default risk
Understanding Cash Flow to Debt Ratio
What is Cash Flow to Debt Ratio?
The cash flow to debt ratio is a coverage ratio that measures a company's ability to pay off its total debt using operating cash flow. It's calculated by dividing operating cash flow by total debt, showing what percentage of debt can be covered by cash generated from operations.
Why Operating Cash Flow?
- •More accurate than net income
- •Excludes non-cash items like depreciation
- •Reflects actual cash generation
- •Shows real ability to service debt
Formula Breakdown
Cash Flow to Debt Ratio = (Operating Cash Flow ÷ Total Debt) × 100%
Total Debt = Short-Term Debt + Long-Term Debt
Debt to Cash Flow = Total Debt ÷ Operating Cash Flow
Interpretation: A higher ratio indicates better debt coverage capability. Ratios above 40% are considered excellent, while below 15% suggests potential financial stress.
Industry Considerations
| Industry Type | Typical Range | Key Characteristics |
|---|---|---|
| Utilities | 15-25% | High debt, stable cash flows |
| Technology | 40%+ | Low debt, high cash generation |
| Manufacturing | 20-35% | Moderate debt, cyclical cash flows |
| Airlines | 5-15% | High debt, volatile cash flows |